Ayala eyes foreign partners in PPP bids

MANILA, Philippines – Ayala Corporation is taking in foreign partners as it pursues bigger public-private partnership (PPP) projects being offered by the Aquino administration.

The listed conglomerate would partner with foreign investors in bidding for the next “big 3,” including the proposed P123-billion ($2.78 billion*) Laguna Lakeshore Expressway Dike project, Ayala Corporation managing director John Eric Francia said.

The cost of the first “big 3” PPPs – the P17.5-billion ($398.07 million) Mactan-Cebu international airport expansion project, the P65-billion ($1.48 billion) Light Rail Transit line 1 (LRT 1) Cavite extension project, and the P35.4-billion ($805.23 million) Cavite-Laguna expressway (Calax) project – pales in comparison with the next, Francia pointed out.

“These range from a private sector investment perspective from $500 million to $1 billion ticket size. If you look at the next big 3, it’s not $500 million to a $1 billion, but you are looking at $2.5 billion to $3 billion,” Francia said.

Because of the scale, he said they need to take in foreign partners who would help shoulder the financial requirements, and have the technical expertise.

“We do have finite resources, be it financial or human resources. Foreign investors really need to show up for these next big projects because we haven’t really seen them in the first 10 or so PPP projects.”

“The reason why we are able to participate is because of our partnership approach. We can really spread the wings some more because we share a lot of the risks and the upsides as well. So, our balance sheet goes a long way because each project becomes less of a strain. We hope we can do, within this administration, at least another one of these major projects,” Francia added.

The Aquino administration is set to roll out 18 PPP projects worth P602.2 billion before June 2015. The projects are part of an inventory of 47 projects in the pipeline, PPP executive director Cosette Canilao previously said. (READ: 18 PPP projects worth P602B for rollout before June 2015)

The Ayala group has won several PPPs, among them the P2.01-billion ($45.73 million) Daang Hari-South Luzon expressway road link and the P1.72-billion ($39.14 million) Automatic Fare Collection System project.

It is awaiting the award of the concession contracts for two other PPPs it won – the P65-billion LRT 1 Cavite extension project and the P35.4-billion Calax project. – Rappler.com

Construction site photo from Shutterstock

*($1 = P43.95)